Canada (Attorney General) v. Campbell et al., (2014) 460 F.T.R. 1 (FC)

• Judge: Martineau, J.
• Court: Federal Court (Canada)
• Case Date: June 16, 2014
• Jurisdiction: Canada (Federal)
• Citations: (2014), 460 F.T.R. 1 (FC);2014 FC 646

Can. (A.G.) v. Campbell (2014), 460 F.T.R. 1 (FC)

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[French language version follows English language version]

[La version française vient à la suite de la version anglaise]

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Temp. Cite: [2015] F.T.R. TBEd. JA.011

Le Procureur général du Canada (demandeur) v. Donald W. Campbell, Pierre Despars et Sylvain Duval, en qualité d'Administrateurs d'Exeltech Aérospatial Inc. (défendeurs/appelants devant l'arbitre) et Serge Bourbonnais, Rita Chiasson, David B. Diggle, Diane Drury, Stephen Hops, Michelle Lamarre, Céline Langevin, Evan Larocque, Gérard Moretti, Gilles Ouimet, André Racette, Laurent Soustiel et Dany Therrien (défendeurs/ex-employés/intimés devant l'arbitre)

Procureur général du Canada (demandeur) v. Stéphane Durand et Taifur Rahman en qualité d'Administrateurs de Centre Montréal Jet (2008) Inc. (défendeurs/appelants devant l'arbitre) et Christinel Astefanoaiei, Alexandre Bouchard, Trevor Bowman, Aldo Canessa, Nicholas Ciambella, Pierre Cofsky, Robert Dawson, Francis Degraaf, Corey Fice, Laurent Foezon, Guillaume Gauthier, Rozita Hafezi Zadeh, Amal Hage, Sean Hand, Noel Hegarty, Joe Iannantuono, Dahlia Iorio, Julian Jonas, Steve Kalms, Christos Katsimbras, Pascal Labelle, Jacques Lacasse, Denis Lavallée, Danish Mahboob, Quentin Matthews, Julien Maugis, Colin Metcalf, Tazi Mhamed, Michel Mondoux, Douglas Morrison, Réal Payette, Meirion Phillips, Janlou Picard, Ian Bruce Poloncsak, Joe Racanelli, Roko Razov, Guillaume Robichaud, Hervé Robichaud, Jean-François Routhier, Carlos Seres, Ian Ward, Spiridon Yannis, Selma Zoghby (défendeurs/ex-employés/intimés devant l'arbitre)

(T-1696-13; 2014 CF 646; 2014 FC 646)

Indexed As: Canada (Attorney General) v. Campbell et al.

Federal Court

Martineau, J.

July 3, 2014.

Summary:

Employees of two bankrupt companies delivered proofs of claim to the bankruptcy trustee under s. 124 of the Bankruptcy and Insolvency Act. As a result, a super-priority was established in favour of each employee up to $2,000 of their wage claims. Many of the employees also applied for benefits under the Wage Earner Protection Program (WEPP) which was governed by the Wage Earner Protection Program Act (WEPPA) and Regulations. Each employee who applied under the WEPP received benefits not exceeding $3,096.45. In accordance with the WEPPA, the Crown became subrogated to the extent of the amount paid under the wage claim each employee filed against his or her former employer and against the companies' directors. The Crown recovered the wage amounts guaranteed in the bankruptcy (the super-priority of $2,000) directly from the trustee managing the bankrupt companies' assets. The Crown had the right to seek the balance from the directors under s. 36(1)(b) of the WEPPA. Rather than exercising that right, the Crown sought to recover the balance from the employees under ss. 31 and 32 of WEPPA. For the Crown to succeed there had to be an overpayment. Wage payment orders were issued to the directors of the companies which deducted the amounts reimbursed by the trustee under the super-priority (Canada Labour Code, ss. 251.1, 251.18). On appeal, referees held that the WEPP benefits constituted wages and other amounts to which the employees had been entitled under Part III of the Code and should also be deducted from the payment orders. As a result, there was no overpayment to the employees. The Crown applied for judicial review of the referees' decisions.

The Federal Court dismissed the application.

Bankruptcy - Topic 3648

Creditors - General - Priorities - Wages - General - Employees of two bankrupt companies delivered proofs of claim to the bankruptcy trustees under s. 124 of the Bankruptcy and Insolvency Act - As a result, a super-priority was established in favour of each employee up to $2,000 of their wage claims - The employees also applied for benefits under the Wage Earner Protection Program (WEPP) which was governed by the Wage Earner Protection Program Act (WEPPA) and Regulations - Each employee who applied under the WEPP received benefits not exceeding $3,096.45 - In accordance with the WEPPA, the Crown became subrogated to the extent of the amount paid under the wage claim each employee filed against his or her former employer and against the companies' directors - The Crown recovered the wage amounts guaranteed in the bankruptcy (the super-priority of $2,000) directly from the bankruptcy trustee - The Crown sought to recover the balance from the employees under ss. 31 and 32 of WEPPA - For the Crown to succeed there had to be an overpayment - Wage payment orders were issued to the directors of the companies which deducted the amounts reimbursed by the trustee under the super-priority (Canada Labour Code, ss. 251.1, 251.18) - On appeal, referees held that the WEPP benefits constituted wages and other amounts to which the employees had been entitled under Part III of the Code and should also be deducted from the payment orders - As a result, there was no overpayment to the employees - The Federal Court, applying the standard of reasonableness, dismissed the Crown's judicial review application - The ss. 251.1 and 251.18 payment orders were mechanisms established to help employees - If the Crown wanted to recover any amounts that were not received from the trustee, it had to take separate court action against the directors.

Master and Servant - Topic 8304

Employment and labour standards - General - Right to wages - [See Bankruptcy - Topic 3648 ].

Master and Servant - Topic 8344.2

Employment and labour standards - Judicial review - Standard of review - [See Bankruptcy - Topic 3648 ].

Cases Noticed:

Canada (Attorney General) v. Johnstone et al. (2014), 459 N.R. 82; 2014 FCA 110, refd to. [para. 15].

Alberta Teachers' Association v. Information and Privacy Commissioner (Alta.) et al. (2011), 424 N.R. 70; 519 A.R. 1; 539 W.A.C. 1; 2011 SCC 61, refd to. [para. 15].

McLean v. British Columbia Securities Commission, [2013] 3 S.C.R. 895; 452 N.R. 340; 347 B.C.A.C. 1; 593 W.A.C. 1; 2013 SCC 67, refd to. [para. 15].

Toronto (City) v. Canadian Union of Public Employees, Local 79 et al., [2003] 3 S.C.R. 77; 311 N.R. 201; 179 O.A.C. 291; 2003 SCC 63, refd to. [para. 16].

New Brunswick (Board of Management) v. Dunsmuir, [2008] 1 S.C.R. 190; 372 N.R. 1; 329 N.B.R.(2d) 1; 844 A.P.R. 1; 2008 SCC 9, refd to. [para. 16].

Manitoba Association of Health Care Professionals v. Nor-Man Regional Health Authority Inc., [2011] 3 S.C.R. 616; 423 N.R. 95; 2011 SCC 59, refd to. [para. 16].

King v. Canada (Attorney General) (2012), 409 F.T.R. 216; 2012 FC 488, affd. (2013), 446 N.R. 149; 2013 FCA 131, refd to. [para. 16].

Schneider v. Anderson, [2011] C.L.A.D. No. 2010, refd to. [para. 19].

Statutes Noticed:

Canada Labour Code, R.S.C., 1985, c. L-2, sect. 251(1) [para. 21]; sect. 251.1(1) [para. 22]; sect. 251.18 [para. 23].

Counsel:

Nadine Perron and Nadia Hudon, for the applicant;

Daniel Leduc and Geneviève Lay, for the respondent/appellants before the referee.

Solicitors of Record:

William F. Pentney, Deputy Attorney General of Canada, Montreal, Quebec, for the applicant;

Norton Rose Fulbright LLP, Montreal, Quebec, for the respondents/appellants before the referee.

This application was heard at Montreal, Quebec, on June 16, 2014, by Martineau, J., of the Federal Court, who delivered the following reasons for judgment on July 3, 2014.